# ASC 740-954: Income Taxes — Health Care Entities

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/740/954/)

Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.

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## ASC 740-954: Income Taxes — Health Care Entities

### Machine-generated study aids

```json
{
  "summary": "This subtopic is a very short industry-specific overlay to ASC 740 that applies only to not-for-profit, business-oriented health care entities. Its single substantive rule is a disclosure requirement: a tax-exempt health care entity must disclose its tax-exempt status (740-954-50-1). It adds no recognition or measurement guidance beyond the general income tax model.",
  "key_points": [
    "The subtopic provides guidance only on disclosure of income tax status for not-for-profit, business-oriented health care entities (740-954-05-1).",
    "Scope follows the Overall health care Subtopic scope in Section 954-10-15, but is limited to not-for-profit, business-oriented health care entities (740-954-15-1; 740-954-15-2).",
    "A tax-exempt entity within scope shall disclose its tax-exempt status (740-954-50-1).",
    "No recognition, measurement, or presentation guidance is added here; the general ASC 740 model (including uncertain tax positions and any unrelated business income taxes) continues to apply."
  ],
  "categories": [
    "Disclosure",
    "Income taxes",
    "Industry-specific",
    "Not-for-profit"
  ],
  "audience_level": "intermediate",
  "student_note": "Easy exam point: the only requirement is to disclose tax-exempt status. The common misunderstanding is thinking tax-exempt status means ASC 740 is irrelevant — such entities can still have taxable subsidiaries, unrelated business income, and uncertain tax positions (including the risk of losing exemption) that require ASC 740 accounting.",
  "related_topics": [
    "740-10",
    "954-10",
    "954-740",
    "958-740",
    "740-20"
  ],
  "key_concepts": [
    "tax-exempt status disclosure",
    "not-for-profit business-oriented health care entity",
    "income tax status",
    "industry-specific guidance",
    "unrelated business income",
    "scope limitation"
  ]
}
```

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## ASC 740-954-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/740/954/#05-overview-and-background)

SEC content: no

##### [740-954-05-1](https://asc.understandingaccounting.org/asc/740/954/#740-954-05-1)

Pending content: no

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This Subtopic provides guidance on disclosures for income tax status for not-for-profit, business-oriented health care entities.

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## ASC 740-954-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/740/954/#15-scope-and-scope-exceptions)

SEC content: no

#### Overall Guidance

##### [740-954-15-1](https://asc.understandingaccounting.org/asc/740/954/#740-954-15-1)

Pending content: no

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 954-10-15, with specific entity qualifications noted below.

#### Entities

##### [740-954-15-2](https://asc.understandingaccounting.org/asc/740/954/#740-954-15-2)

Pending content: no

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The guidance in this Subtopic applies only to not-for-profit, business-oriented health care entities.

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## ASC 740-954-50: 50 Disclosure

[Read section](https://asc.understandingaccounting.org/asc/740/954/#50-disclosure)

SEC content: no

##### [740-954-50-1](https://asc.understandingaccounting.org/asc/740/954/#740-954-50-1)

Pending content: no

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Tax-exempt entities shall disclose their tax-exempt status.